More Changes May Be Ahead for TEXAS Grants

Officials gathered at a Texas Higher Education Coordinating Board forum to begin a conversation about tweaking the state's primary need-based financial aid program for college students.

by Reeve Hamilton
April 6, 2012
3:33 PM

Graphic by Todd Wiseman

The state’s primary need-based financial aid program for college students, TEXAS Grants, wasn’t immune from difficult cuts made in the 2011 legislative session. Now officials are looking ways to adjust to the decreased funding.

At an open forum today, the Texas Higher Education Coordinating Board discussed the future of the program — which covers a student’s tuition and fees at most public institutions — and how it should change in light of the cuts. Many higher-ed administrators took part in the talk.

Texas Higher Education Commissioner Raymund Paredes said that it was incumbent to develop a plan to make the best use of the state’s financial aid dollars going forward now that a precedent for cutting them has been established.

“We need to all work together to make sure we get it straight,” he said.

The program, whose funding was reduced 10 percent to $559 million, has already undergone some changes. Last session, legislators approved a new distribution model that gives high-performing students priority access to what had previously been a purely first-come, first-served pool of money.

No decisions were made today. Officials emphasized that the forum was the beginning of a discussion about TEXAS Grants, with an eye on legislative changes that could be made in the 2013 session and beyond.

Paredes said the intent of the TEXAS Grants program — enabling poor students to finish college without fear of financial woes — had not changed since the program was established in 1999. But it has not been able to keep up with the growing numbers of needy students enrolling in higher education. The last year that the coordinating board considered the TEXAS Grants program fully funded was 2004.

The coordinating board had estimated that after the 2011 rules were instituted, current recipients will continue to receive funding, in addition to 33,000 new students, but only 30 percent of eligible students would receive the grant.

Lee Holcombe, director of the Texas Higher Education Policy Institute, noted that first-year students with 20 percent of their costs covered by financial aid are significantly more likely to continue on to their second year than students with only 10 percent covered. However, the same is not true of students with 90 percent as opposed to 80 percent, indicating that there is more bang for each financial aid buck given to students with less aid.

Additionally, the return on investment lessens with each year, Holcombe added. So a student’s financial-aid level affects the chances of persistence from the first to the second year of college more than it does the move from the third year to the fourth year.

One possibility discussed at the forum was giving smaller awards to a greater number of students and prioritizing awards to lower-level students as opposed to upperclassmen.

Currently, students who get the awards are able to renew them, provided they keep their grades up, until they get their degree — or up to one year beyond the prescribed amount of time for their degree plan. Concerns were raised that the money spent on renewing students would decrease the program’s ability to entice more needy high school students to enroll in higher education.

“TEXAS Grants is kind of a clunky program,” said Dan Weaver, assistant commissioner at the coordinating board, “because you have big, huge awards for not very many people.”

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